Bill Orr Posts

While Governor Christie is known to go off script, vent his anger, and verbally assault others, he just as frequently stays on message. His message for a long time has been the "Jersey Comeback." RNC Chairman Reince Priebus when he announced who would be the convention keynote speaker said, Christie will make the case for America's Comeback Team." The reality is that the U.S. is doing much better than NJ, and that NJ is seriously under performing. Only in Christie's imagination do we have a comeback, and even his crumbling version revealed new cracks today with the just released July data for higher unemployment and a decrease in job growth. Christie is ill suited to deliver a comeback message. While some may revel in the attention our governor has brought us, we have to be alarmed at his economic stewardship.

We have little more than a year to insure that he is not elected to a second term. We don't expect our governor to perform miracles, and we realize that our country has been going through a wrenching economic dislocation. However, Christie's failure in key areas - unemployment, GDP, housing and job growth - is demonstrable when comparing NJ with other states and with the U. S. as a whole.

Most people look to unemployment data as the key measure of our economy. Here the failure of Chistie's policies is particularly evident. US Bureau of Labor Statistics data indicates that when Christie came to office in January 2010 the unemployment rate in NJ was 9.7% and the rate for the US was also 9.7%. After 30 months in office we learn today that NJ's unemployment for July not only increased from 9.6% to 9.8%, but is now higher than when Christie became governor. The US rate is 8.3%, significantly below ours. Only a very few states have a higher rate. Our unemployment has been stuck at 9% or higher during Christie's entire tenure. Most recently while he prepares to tell the nation his "comeback," story here is the trajectory of our unemployment: March: 9.0%, April: 9.1%, May: 9.2%, June 9.6% and now in July: 9.8%.

So this month we have higher unemployment, a reduction in new jobs, an unrealistic state budget revenue forecast, a gloomy projection for the next six months, and serious housing problems. Perhaps more disconcerting than the failure of Christie's policies has been his repeated insistence that we are enjoying a comeback and his lack of remedial action. If he can't admit mistakes what likelihood is there that he will right the floundering ship of his economic stewardship?

"For years, Congressman Ryan has fearlessly and thoughtfully led the national debate about how to forge a better and more prosperous path for our country with real conservative solutions." - Samuel Raia, NJGOP Chairman

Given how much Chris Christie has abandoned his governorship duties and spent time out of state, we might hardly have noticed any difference had he been selected as Romney's running mate. However, fortunately Ryan became the annointed one. Yes, Ryan has been fearless and has offered conservative solutions. His solutions emphasize multiple tax cuts but not tax enhancements (particularly for the wealthiest) needed for the government to offer essential services, vouchers for Medicare so low as to shift unexpected costs to the public, and state block grants for Medicaid which will further reduce services for those who can least afford them.

Let the Republicans run on this platform and watch them bite the dust. This is a platform that the Democrats can attack with gusto. Add in the fact that Republicans want to end or at least weaken the Affordable Care Act, and there are more votes that will head toward President Obama. Senior citizens, independents, and anyone living on a low salary without health insurance, or only barely able to afford it, will look with skepticism at what the Republicans are proposing. Seniors should be horrified. President Obama and his team must waste no time in attacking Ryan's fiscal approach which moves the financial burden onto the public and actually does very little to solve the long term debt and entitlement concerns.

Rather than talking about the faltering economy, a stumbling block for Obama, we are discussing a plan which has huge down-side possibilities for so many Americans. I suspect that Romney who ultimately dictates the Republican platform will finesse some of the more obnoxious aspects of Ryan's plan and mold something a little more warm and fuzzy. However, even Romney's economic plan announced during the primaries was based on Ryan proposals. Romney will be stuck defending what essentially will be the Ryan Plan, version 2.0.

Romney could have selected someone else who might have broadened his base. The Tea Party and far right would have gotten out the vote and cast their anti-Obama ballot regardless. Christie would have broadened the base but he is too much of a loose cannon and would have sucked oxygen away from Romney. While as a Governor leading the charge, Christie can generate followers, as a freeholder he was a failure because of his inability to collaborate with peers. (We all know the choice words he uses to address his legislative peers.) There were other options Romney could have adopted, but he has made his bed, will have to sleep in it, and will find it uncomfortable. A great selection. In the meanwhile we still have Christie to kick around and demolish whenever he visits New Jersey.

Who would think that an organization which calls for "BOLD DECISIONS TODAY," would be so cowardly as to hide the identity of its supporters and not mention its board members on its own website. Rather than be proud of what it espouses, it hides behind the cloak of anonymity provided by an IRS 501 (c) (4) law designed for social welfare organizations. Perhaps, in Syria boldness might necessitate anonymity. In the U.S.A. do we really need a tax law which permits individuals of any party to pretend their mission is a social cause while they are actually a mouth-piece for a particular politician? At least Super PAC's are often more forthcoming: we know about Adelson and the Koch brothers. Initially we knew almost nothing about the Committee For Our Kids Future(CFOKF), except that it had an unappealing acronym and practiced secrecy.

Thanks to the Star Ledger's Ginger Gibson, WNYC's Bob Hennelly and Blue Jersey's the-promised-land we now have more information on CFOKF, and additional digging has brought to light other facts. Although CFOKF states that as a non-profit organization it "advocates for tax and government spending reforms," its full-throated support of Governor Christie in its ads tells us another story. While Christie denied involvement with the group the evidence has proven otherwise.

Ginger Gibson in September 2011 reported in the Star-Ledger: "Gov. Christie supporters launch $1.5M ad campaign to tout his successes." The TV ad refers viewers to the CFOKF website. The ad mentions gridlock in Washington and proclaims "Chris Christie is taking NJ in another direction." Gibson further reported that CFOKF had a three-member board that includes Kevin Feeley, President, Bob Teeven, Treasurer, and Lynn Grone.

Now we learn in Bob Hennelly's article today, Christie's National Prominence Aided by Anonymous Money, about CFOKF's newest ad. It praises "Christie's bi-partisan teacher tenure reform" and asks viewers to "help Chris Christie and bi-partisan reformers." (See Jersey Jazzman's diary on this matter below.) Hennelly notes that CFOKF claims "it has spent more than $6 million dollars in the last 11 months on the pro-Christie ad campaign." He further adds to our information about this group: "CFOCF lists a phone number belonging to Brian Jones, the former Communications Director for John McCain's presidential campaign. Jones now works for the Blackrock Group and serves as CFOKF's spokesperson.

How convenient - With a 501 (c) (4) organization, while personal donations are not tax-exempt, the organization itself remains tax-exempt, contributions may be deductible as trade or business expenses, and organizations are not required to disclose their donors publicly. Furthermore such groups are immune to NJ campaign and action committee disclosure laws. With the current education-oriented ad campaign, for example, we do not know if contributors include the for-profit education industry. When an earlier (now defunct) pro-Christie 501 (c) (4) organization, Reform Jersey Now, was hounded into making public its donor base, it was revealed that it included major state contractors.

501 (c) (4) organizations which tend to serve the goals of a specific politician obfuscate about their mission, tend to have a single website and cloak their leadership and organization in secrecy. An organization such as Garden State Equality which is registered as both a 501 (c) (3) and (4), has a non-obfuscated social mission, does not hide its leadership, and links its main (c) (3) website (which accepts tax-exempt donations for its social programs) with its (c) (4) website (lobbying non-tax exempt donations).

With CFOKF, we have a less than bold organization, frightened by its own shadow and trying to hide its leadership. It is determined to preserve the secrecy of its donors whose agendas are unknown and who may be in contravention of NJ pay-to-play rules. It misleads the public with a supposed social service mission, while its true purpose and the object of its adulation denies he has anything to do with the group.

In the London Olympics Michael Phelps and Ryan Lochte have certainly received their share of attention. However, in what the Star Ledger's Steve Politi has said "might be the most dominant swimming performance of these games," Rebecca Soni, of Plainsboro, won another gold medal in the 200-meter breaststroke, breaking her own world record in the process. Also in this olympics she won a silver in the 100-meter breast stroke. In 2008 she likewise won gold in the 200 and silver in the 100. She has become the first woman in Olympic history to win two 200-meter breaststroke gold medals.

The Olympics of course has been heavily commercialized. Louis Menard in the New Yorker says, "athletes settle for silver; they win the gold." Nonetheless in the closing ceremony they commingle without regard to who won medals or the nation or state they represent. Before we reach the end of the London Olympics, more New Jerseyans may win gold, silver or bronze, but all of them can be immensely proud of their achievements.

The Legislature today with near unanimity approved a resolution (SCR110) that would seek voter approval to amend the NJ Constitution and make it legal to force sitting judges to pay more for their pension and other benefits. As a result this issue will be brought to a vote by the electorate in November. Many would say that judges, like legislators and so many other New Jerseyans, should pay their fair share of the rising costs of pensions and health benefits. What's good for the goose is good for the gander.

However, the NJ Supreme Court had issued a ruling last week that angered the governor, legislators and probably many New Jerseyans who were aware of it. The state constitution forbids the Legislature from reducing the salaries of sitting judges. Others may disagree, but the court determined that increasing pension and benefits costs would reduce current judges' salaries. The Court ruled (Paul M. DePascale v. State of New Jersey (A-34-11) (069401)) that this salary protection is meant "to protect the independence of the judiciary and to ensure that it remained a separate and equal - not subordinate - branch of government."

I happen to like our Supreme Court and place a high value on its independence. This court is normally our last resort and serves as a protector of our rights and a bulwark against injustice. A remarkable lack of deference was displayed toward the court in today's action. Even though the vote was 3 to 2 it still remains the court's decision.

While exceptional circumstances can necessitate bringing a matter to the electorate, the decision in this case does not seem to rise to that level. It seems more like overkill. It only impacts current sitting judges, and its loose language may have unintended consequences.

Sometimes with seemingly populist and popular issues the Legislature rushes to judgment. In this case the Legislature's move represents poor judgment toward its co-equal branch of government.

Stella Tulli recounts the events of her sister's murder by a CEC escapee, and her own painful, frustrating and hear-breaking experiences in this Blue Jersey diary.

Following Monday's Assembly Law and Public Safety Committee's aggressive questioning, particularly of CEC, we learned more about this secretive private organization and the calamitous disarray at its halfway houses. However, Blue Jersey research into CEC's non-profit arm - Education & Health Centers of America (EHCA) - reveals disturbing new details. EHCA was created to circumvent the law that requires only non-profits can receive halfway house contracts from the Department of Corrections (DOC). We have learned that EHCA reduces transparency, adds unnecessary costs to the halfway house operation, allows selected individuals to receive dual compensation, lets CEC retain profits in EHCA which are nontaxable, offers no firewall between the two firms, and donates to organizations from which it seeks favors for CEC.

EHCA's most recent non-profit 990 tax filing provides a wealth of information. In the fiscal year ending June 30, 2011, EHCA received $71,049,271 in revenue from NJ State & local governments. It passed on only $69,038,017 to CEC as a "support service fee," to run the halfway houses. EHCA kept $2,011,254 (2.8% of EHCA revenue). With EHCA, CEC gained a second entity to divert NJ government funds away from direct CEC services and into separate coffers controlled by CEC.

What did EHCA do with its $2,011,254? First of all, $664,435, which could have been spent on inmate services, was treated as EHCA retained earnings and added to its fund balance. As an entity designed theoretically as a "pass through" organization to get funds to CEC for program purposes, it became a repository to divert funds and allow John Clancy as Chair of both CEC and EHCA to do as he wished. These retained earnings held by the non-profit EHCA are nontaxable, whereas, if they were retained as profit by the for-profit CEC they would be subject to tax. In effect, EHCA reduces CEC's taxes.

Here are some additional uses for the $2,011,254 pocketed by EHCA. John Clancy paid himself $350,000 as Chair of EHCA, claiming to work 30 hours per week for EHCA - an entity which represents only a fraction of CEC's total activities in 15 states. This salary excludes whatever he received from CEC as its Founder and CEO to which he likely dedicates the majority of his time. In the process he is using a NJ non-profit organization receiving our government funds to pay for work most likely performed on ventures in other states. The total compensation costs of this "pass through" agency for its officers, directors, trustees and key employees was $581,863. Other salaries were $262,292, and employee benefits and payroll tax were $84,855. A lot of costs just to pass government funds to CEC.

Other expenses included legal: $112,332 and accounting: $31,500. With no real difference between the two entities, EHCA added occupancy costs: $60,019, office expenses: $22,073 and other costs for insurance and depreciation.

During Assembly testimony Dr. Robert Mackey, CEC Senior Vice President, testified about the required "firewall" erected between CEC and EHCA. Nonetheless, Dr. Mackey stated he received part of his salary from EHCA and that his responsibilities span many states. Assemblyman Joe Cryan (D-20) rightly scoffed at the notion of a "firewall" as Mackey and Clancy work for both organizations. Not mentioned by Dr. Mackey was that Maria Carnevale, as an employee of EHCA with compensation there of $102,600, is also listed in the CEC website as part of the "CEC Management Team" as Assistant to John Clancy, presumably with an additional salary.

Beyond the fold: more about the fake firewall, donations, the impact of EHCA, and the need for change. Dr. Stephen Manocchio, a Hoboken infectious disease specialist, received income of $171,000 from EHCA, yet is referred to in CEC literature as CEC's Medical Director. Any notion of a firewall is absurd, but EHCA's existence does provide the opportunity to pay extra sums to favored employees and disguise the total payment certain individuals are receiving. A lawyer, for example, who works for CEC could also conceivably receive consulting fees from EHCA's legal expenses.

CEC as a for-profit can and does make political contributions, but EHCA as a non-profit has severe legal limits on such contributions. Nonetheless, EHCA spent $86,200 on donations, presumably not for political purposes, but certainly to curry favor and help CEC's business interests in spite of some supposed firewall.

The existence of the money held back by EHCA, some of which would not have to be expended if there were only one firm, hints at the potentially large combined profit between CEC and EHCA. It suggests that some monies that NJ spends might be put to better use with a different contractee.

As most DOC halfway house awards are now based on a daily fee per bed used, not actual costs, CEC has certain freedom to use funds as it wishes, but it has abused that freedom, abused residents, and abused the public which becomes endangered when residents escape. Stella Tulli, sister of a woman murdered by a CEC escapee, opened the Assembly's hearing and remained a strong presence throughout the day. CEC appears to be in shambles, yet its leaders are doing just fine. Its non-profit EHCA socks away retained earnings while paying no taxes. Perhaps, Mr. Clancy feels he needs a raise ... Well EHCA would probably be happy to oblige.

However, legislators, Mrs. Tulli, residents, and taxpayers should not be satisfied until genuine remedies are enacted. As committee chair Assemblyman Charles Mainor (D-31) said, "When escapes, gang activity, drugs and sexual abuse are widespread and yet Governor Christie opposes improved oversight, something is wrong and terribly unacceptable." Or as Mr. Ibrahim Sharrif testified, "The cancer is the money... It's all about the money." And for that we need look no further than the non profit tax returns of EHCA.

EHCA's NJ Charitable registration #: CH0330700. EHCA is located in Wall NJ and as a is 501 (c) (3) non-profit organization is obligated by law to register with the NJ's Division of Charities and report its expenses and payments to affiliates on an annual basis. (Because of database peculiarities, the way to obtain a brief summary of EHCA'a report is to enter Education in the above link, select a maximum return of 500 items and then cycle quickly to EDUCATION AND HEALTH CENTERS OF AMERICA.)

EHCA's Federal Tax ID: 22-2425650

Here is how one independent organization rated EHCA as a non-profit. Based on 2009 data Open Organization scored EHCA in financial performance at 55 out of 99. "This score represent the relative financial performance of this organization relative to all of the other organizations in our database of 15,000+ of the most established non-profit organizations in the United States. Performance Scores range from 1 to 99. A score of 50 means that the organization is at the middle of group for that criteria."

Pollsters, like doctors conducting a clinical trial of a new drug, prefer to achieve a statistically significant conclusion such that in comparing X opinion (or drug) with Y opinion (or drug) one conclusively trumps the other. However, it does not always work out that way.

In this past weekend's poll there were 10 votes indicating Governor Christie will run for reelection and 10 votes indicating he will not. There were six comments, the most extensive of which explained why Christie will not run.

Two weekends ago we asked readers to select a NJ movie and tell us why they liked it. Three movies from the supplied list received multiple votes: Clerks (5), Chasing Amy (3), and the Station Agent (2). Six films received one vote each: Garden State, Eddie and the Cruisers, Harold and Kumar Go To White Castle, A Beautiful Mind, Pall Blart Mall Cop and On the Waterfront. Another movie, not on the list, Big Night, received two commendations from among the 13 comments.

We have recently gone through some expensive primaries and will soon face expensive elections with some candidates better off than others.

Below are financial data for campaigns in the more competitive or closely followed congressional Districts (CD's) and the Senate race as of their reports of 6/30/2012 to the Federal Election Commission. The amount spent for campaigns covers the 2011-2012 cycle. The debt reported represents loans (from the candidates themselves or elsewhere) which may or may not be repaid during the current session.

Perhaps you are on vacation, at a beach somewhere, but undoubtedly you are spending all your time fully focused on the upcoming gubernatorial election. Right?... Well in any event it's not too early to consider whether Governor Christie will run for reelection in 2013, as it would impact potential candidates from both parties.

There are good reasons why he might and good reasons why he might not.

What do you think?

Go below the fold to cast your vote as "Yes He Will" or "No He Won't," let us know the reason(s) for your vote, and read what others have to say.

Today's Star-Ledger article on the Senate Legislative Oversight Committee Hearing on halfway houses reported on the early segment of this event which in total went from 2:00 PM to about 6:00 PM. The session began with a "politically correct" but on-point exposition of shortcomings presented by Comptroller Boxer. The early segment then moved into a full-throated defense by Department of Corrections Commissioner Gary Lanigan and Community Education Centers founder John Clancy. It was not until late in the afternoon when counseling, corrections, and foundation individuals testified about the true depth of the problem.

It was in the unreported later part of the day when experts testified about lack of oversight and security, large numbers of inmates failing drug tests, lack of real programs, the revolving door of inmates going back and forth between prison or jail and halfway houses, inmates' ease in getting contraband, low staff salary levels, secrecy maintained by the sites, lack of true cost information, and more. They made suggestions including performance contracting (reaching outcomes as a basis for payment), incentives to reduce escapes including third party review, opening up bidding to allow more competitors, and obtaining more of the available federal grant matching funds.

At the end Chair Senator Robert Gordon summarized some possible solutions: develop legislative tightening of contract procurement, increase staffing, improve staff training, assure that pre-adjudicated inmates not be sent halfway houses, have uniformed officers in sites, and use performance contracting. For another take on yesterday 's hearing read today's N Y Times article.

On Monday at 10:30 AM the Assembly Law and Public Safety will hold its own hearing. Members will have the benefit of having learned what was disclosed during the Senate hearing and being able to pursue issues further.

New Jersey's unemployment picture is ugly, going from bad to worse, and it compares unfavorably both to the national average and to the rates of other states in our region. These are NJ's recent unemployment rates: March: 9.0%, April: 9.1%, May: 9.2% and now for June: 9.6%. The June rate is 1.4% higher than the national average of 8.2%, indicating that although national economic difficulties affect states, other states are coping much better with the rough economic times.

New Jersey's 0.4% increase from 9.2% to 9.6% in June is in contrast with the national average which remained unchanged at 8.2%. As indicated in the chart below the June increase is higher than the increase in any of the four other regional states.

More significant than a single month-to-month change is the change over a longer period. Chris Christie assumed the governorship in January 2010 when NJ's unemployment was 9.7% - the same as the nation's. Since then the national rate has decreased 1.5% whereas NJ has decreased only 0.1%. Likewise, during this 30 month period when our unemployment decreased by only 0.1%, you can see below how much better others in our region fared, except for NY. We continue to have the highest unemployment in this area. A dismal record!

How is that for a comeback? Christie's boasting about his comeback is just so much glitter. He may paint it pretty, but we know it's not.

The long-awaited Halfway House drama starts at about 2:00 PM with a hearing of the Senate Legislative Oversight Committee. There were many warnings of problems culminating in the N Y Times series Unlocked. Now the investigation begins.

Key scheduled witnesses will include:

Comptroller Matthew Boxer whose June 2011 audit revealed serious problems and provided 26 recommendations for changes. A key question is what changes have been made?

John Clancy, CEO of Community Education Centers, whose firm received last year $71 million of the $105 million our government spent on such facilities. His operation came under withering criticism in the NY Times articles and is now believed to be in financial distress.

Gary Lonigan, Commissioner of the Department of Corrections, who since 2010 was reponsible for monitoring CEC and other halfway houses.

Members of the Senate committee are: Robert Gordon - Chair, Barbara Buono - Vice-Chair, Thomas Kean, Joseph Kyrillos, Teresa Ruiz, and Paul Sarlo. In firstamend07's diary, he asks whether the event will be "fight or fluff." The Democrats have lots of ammunition, but some of the witnesses will be wily and obfuscate, while Republicans will try their best to protect their governor who has praised and enabled CEC.

There are about 1.3 million people in NJ without health insurance - people who forgo needed doctor visits, can not afford medicines, avoid surgery, receive short term help in emergency rooms, and die earlier than those insured. One would think that such a large group would have a significant voice in NJ's approach to the Affordable Care Act (ACA). Alas!... no way.

After years of groups and individuals raising warning signs about problems in halfway houses, the issue was placed in stark relief in a N Y Times devastating series of articles Unlocked by Sam Dolnick. On Thursday the Senate Legislative Oversight Committee chaired by Bob Gordon (D-37) and vice-chaired by Barbara Buono (D-18) will hold a hearing. On Monday the Assembly Law and Public Safety Committee chaired by Charles Mainor (D-31) and vice chaired by Gilbert Wilson (D-5) will hold another hearing. The goals are to understand the problems and bring about solutions.

The Problems:Past articles in the Blue Jersey CEC Investigation series have highlighted serious improprieties regarding halfway houses - particularly those of Community Education Centers (CEC), which last year received $71 million out of $105 million in government expenses. It is a story of CEC's Founder John Clancy who used a dubious agreement from a prior Attorney General to set up a shell non-profit company and then through large political contributions, lobbying, PR, a well connected legal VP, and friendship with a U.S. attorney and later governor to create a large corrections corporation. With insufficient monitoring from the Department of Corrections (DOC), this company ran facilities that bred an atmosphere of inmate drugs, escapes, violence, gangs, rapes, and deaths. With unqualified staff, security was compromised, the public at large was placed in danger with unnecessary escapes, and the goal of helping to reduce recidivism was given short shrift.

Christie confidante and CEC Senior Vice President, William Palatucci aided, abetted and defended CEC. Governor Christie as a lawyer at Dughi and Hewitt, as U.S. Attorney, and later as governor at a minimum praised and enabled the activities of CEC. He failed to implement remedies that other more responsible parties were calling for over the years, and he may have done so willfully and improperly. Now we are at the point where the valid role of halfway houses is being discredited, and the largest company in New Jersey is facing such severe financial problems that the DOC might need to take over at a moment's notice thousands of inmates lodged annually in CEC facilities. CEC failings are not confined to NJ DOC contracts, but extend to those held by NJ local governments and such states as Texas, Alabama, and Colorado.

There are numerous solutions. The agreement that allowed CEC to use a non-profit organization as a front, in contravention to established regulations, should be ended for any future contracts and possibly existing contracts. CEC was able to build a monopolistic position, and it is now time to enable legitimate non profits to compete fairly for DOC contracts small and large. The Boxer audit laid out key recommendations for remedies, and it is essential to establish what progress DOC has achieved so far and to assure the recommendations are met. Dangerous inmates should not be lodged in halfway houses. The security and living conditions of inmates need to be improved. Process measures must be established to assure that the goals of reducing recidivism through drug treatment, job readiness, and other skills preparatory to re-entering the general population are being well administered. More qualified staffing is important. Pay-to-play regulations urgently need strengthening. People like Governor Christie should be disabused of the notion that privatization brings huge savings, as previous studies have shown that such savings are scant. Goals should include integrity, safety, and reducing recidivism not an elusive search for savings.

Below the fold are suggestions for some of the individuals who should testify and what questions legislators might ask the individuals.

Comptroller Matthew Boxer - He can outline his findings and recommendations from his report of June 2011 and address any correspondence and outcomes following the report. Was access to data that would have revealed CEC's financial distress withheld?

DOC Commissioner Gary Lanigan - As a basis to understand DOC's management of halfway house contracts, it is important to obtain DOC contracts, monitoring report, correspondence, and actions taken before and after the Boxer audit to determine the responsiveness of DOC and CEC to the audit recommendations. Were genuinely unannounced visits carried out? When did fines for misperformance start? Have escapes, violence, drugs, and gangs been reduced? Is there a better policy to assure dangerous criminals are not lodged in halfway houses? What are the performance measures being used to determine the success rate of programs designed to reduce recidivism? What has been done to recruit and train better staff? What plan does DOC have to manage residents in CEC custody if CEC's financial distress results in poorer performance or bankruptcy? What programs/policies does DOC have to encourage and assist other groups in applying for halfway house contracts in view of the monopolistic, well-connected, lobbying, and patronage capabilities of CEC?

Attorney General Jeffrey Chiesa - Legislators should ask for the AG's agreement or ruling in the mid 1990's and correspondence between the offices of the AG, Dughi and Hewitt law firm and and CEC, which allowed CEC's creation of Education and Health Centers of America as a "non-profit" to contract with DOC and pass revenue on to CEC. The Boxer audit questioned whether such an an agreement was proper and asked for an updated ruling on the matter. As Chris Christie was a law firm member, he may have been involved in drafting the agreement but he was not governor at the time and correspondence from him would not fall under Executive Privilege.

CEC Founder John Clancy, Vice President Willam Palatucci, former Treasurer, Frank English, and curent Chief Financial Officer Michael Hellriegel - These individuals should be questioned about CEC's current financial position and whether it withheld pertinent data. More important as a State contractee, CEC must be required to turn over financial records for the entire company. The same questions suggested for Commissioner Lanigan regarding CEC's actions over the past few years apply, including data and statistics on escapes, violence, deaths, staff training, security, and inmate counseling.

Getting to the bottom of the problems may well necessitate the use of OPRA.

Other individuals who could be asked to attend could include the Executive Director of other Halfway houses, such as the Association on Corrections, individuals from law and academia, such as John Jacobi.

Previous articles in Blue Jersey's Series CEC Investigation are available here.

Puppeteer: Let's call Founder John Clancy the puppeteer. The origins of CEC go back to 1979 when he was a youth services county employee and decided there was money to be made through drug and alcohol treatment for those incarcerated. He was so successful that in 2007 private equity firms Primus Capital and LLR Partners invested $53 million in Community Education Centers. Primus boasted that CEC was "the nation's largest provider of offender re-entry services with 97 facilities in 22 states and revenues in excess of $200 million." Today CEC is even larger thanks to a little help from his puppets.

In 2000 and 2001 both Christie and Palatucci were registered lobbyists for CEC. In 2005, after representing CEC for 14 years, Palatucci joined the company as its Senior Vice President and General Counsel. His ongoing close relationship with Christie includes helping run Christie's gubernatorial campaign, serving as co-chair of the governor's inaugural committee, sitting on the board of Reform Jersey Now which raised money to promote Christie policies, and being a member of the Legislative Apportionment Commission.

As US Attorney, Christie attended the ribbon cutting ceremony in 2007 for CEC‟s new corporate headquarters and the ten year anniversary celebration in 2008 of Talbot Hall. By 2008 with lots of cash, a U.S. attorney as a friend, a well-connected legal V.P., a dubious, sweet-heart deal on EHCA, little DOC oversight, and weak competitors, Clancy must have been asking himself, "What's not to like?"

But it gets even better for Clancy thanks to more help... also warning signs... and let's not forget CEC donations beyond the foldBut it gets better. Governor Christie‟s first year in office was marked by drastic and dramatic budget cuts. However, one area sees funding restored after an initial cut. He restores $3 million in funding for halfway houses. Later in the year he attends the 10th Anniversary of CEC's Delaney Hall just months after a resident was murdered there. In 2011 Christie attends the wedding of John Clancy's daughter and hires the groom, Samuel Vivattine, to work as an assistant in his office. By now an advocacy group has compiled a list of six preventable deaths of inmates in CEC's custody.

Warning Signs

This circle of entrenched interests was so busy enjoying the "fruits" of privatization and patronage that it ignored warning signs. Here are just a few:

Have you ever noticed so many expensive, frequent TV commercials for a particular product or incredible claims for a product that you say "I'm not going to buy that item because its price must be jacked way up or its quality is much less than claimed?" Well in the case of CEC it has high expenditures for political campaign contributions, PR, lobbying ($110,00 for lobbying in Trenton in 2010), and legal costs (67 cases just on the current federal docket). These expenditures are passed on to State and local governments which shortsightedly seek supposed privatization savings. For CEC it's the "cost of doing business" and only serves to increase its contracts and enhance profits. With little oversight, quality need not be a concern, but as the NY Times series Unlocked points out the losers sadly are the residents of the facilities and the general public when residents escape. The puppeteer and his puppets are just fine thank you.

For many people summertime is movie time, and there have been plenty of movies about New Jersey.

We are not asking which is necessarily the "best" NJ movie. From a list of over 20 choices, select and vote for one and let us know why. It may be because it bring back a memory, typifies some aspect of NJ life, is evocative of a period, a great film, an enjoyable comedy, or any other reason. And feel free to mention a movie not on the list.

Go beyond the fold to click on a film, tell us why you like it, and see what others are saying.

"The recent disclosures about security lapses and other failures at the halfway houses contracted by the Department of Corrections (DOC) document a disturbing history of mismanagement and neglect that has jeopardized public safety and cost the lives of innocent individuals." - Senate Majority Leader Loretta Weinberg (D-37) in a letter of July 10, 2012, to NJ Department of Corrections Commissioner Gary M. Lanigan

After a lengthy investigation State Comptroller A. Matthew Boxer in June 2011 issued a report documenting "crucial weaknesses in state oversight of inmate halfway houses." He made 28 recommendations to enhance DOC oversight. The report indicated "DOC's response notes that it is working to implement the recommendations." In June of this year (twelve months later) the NY Times published a series of three frightening articles which revealed that halfway houses were still plagued by "escapes, gang activity, sexual attacks, and rampant drug use." Senator Weinberg's conclusion: "Obviously, whatever changes were made have failed."

In her letter to Commissioner Lanigan Senator Weinberg requested "full accounting by the DOC of its actions since June of last year to correct the problems identified by the comptroller and an explanation of why these actions failed." Community Education Center (CEC) operates 70% of these facilities for inmates who are finishing their sentences and parolees who are re-entering society. The Times reported at one CEC site an inmate escaped in the process of being transported and murdered his girlfriend hours later. Another individual at the same facility murdered a resident being held on a motor vehicle violation.

More beyond the fold on problems and solutions for the upcoming investigations To understand the problems and seek solutions a key first step is a careful review of DOC procedures, rules, monitoring and action reports in the past one to three years. Do the reports document unannounced visits? What procedures and measures were used to evaluate performance? What steps were taken by DOC to better enforce current procedures and what new requirements were placed on halfway houses? What were the outcomes in terms of escapes, violence, gang activity, drug use, security, inmate counseling/training, and staff training/performance?

Another significant problem is that CEC operates in multiple states and has grown large and wealthy as a for-profit firm with deep pockets for political campaign contributions and ample money to hire lobbyists and PR personnel. With CEC having 70% of the halfway house business in NJ it occupies a monopolistic position and inhibits other groups from applying for DOC halfway house contracts.

One solution is to enforce the law which restricts DOC to delegating correctional responsibilities to non-profit entities. CEC has circumvented or violated the law by creating a non-profit organization to contract with DOC and then to funnel the monies to CEC. There are suspension and debarment procedures that could be used to prevent CEC from future grant applications and even to terminate current grants should investigations determine such is warranted. There are also federal lobbying and State "pay to play" laws which if shown to be violated could lead to debarment.

Governor Christie, who likes to "shoot from the hip" and cannot control his anger nor his bullying, must be a nightmare for his handlers and even his security detail who do not know what to expect minute-to-minute. In his prepared, scripted speech to the recent joint session of the legislature he spoke in a modulated tone, was conciliatory to Democrats and enunciated with some degree of clarity and logic his goal of passing immediately a tax reduction bill (fortunately to no avail).

However, during his TV, radio, press conference, Twitter, and "Town Hall" moments bedlam quickly develops. He generally starts off with a few key agenda ideas and heavily promotes them. Then all too frequently he goes off script, becomes an "entertainer," plays to the crowd with his "Jersey Guy" or "Jersey Shore" persona, and acts like loose cannon. Although he is level-headed enough to start off with some clear purpose, he may well later contradict himself, give off-the cuff opinions, say things that are inaccurate, get angry and insult people.

The above seemingly contrarian tweet from Governor Christie is not entirely surprising. Occasionally his "shooting from the hip" statements make sense not only for him but for New Jersey as a whole.